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Was the right decision reached?

Monday, December 6th 2004, 10:40PM

by Philip Macalister

Supplying readers with home loan news and mortgage rates is something that has become a core element of what Good Returns does.

Consequently we have been keeping a pretty close eye on what has been happening in the current round of mortgage rate wars.

BNZ's campaign to undercut everyone else has been fascinating to watch, as its margins on two year rates are so tiny they are almost invisible, plus its "Unbeatable" campaign has meant that the other banks can set the BNZ's rates.

A core part of the BNZ's campaign is that by cutting out brokers it can lower its costs to lenders.

This argument is an "interesting" one as BNZ disenfranchised brokers years ago when it refused to allow them to sell its popular Global Plus home loan. Hence brokers wrote very little business for the bank and the bank finally turned around and officially cut the ties.

As we reported the other day the claim has been challenged through a complaint to the Advertising Standards Complaints Board.

BNZ put up an argument, and illustrated it with numbers, to prove its case, that by not paying commissions it could offer cheaper mortgages. The majority of the board accepted its argument, consequently the complaint was dismissed.

I think on the whole the ASCB does a reasonably good job, but in this case it has been duped as BNZ hasn't shown any of the costs it incurs to sell mortgages through its mobile manager network.

For instance it took out the commission cost of brokers, but didn't include the salary cost of its staff.

If you add those costs into the argument then the ASCB decision may be quite different.

Does the board think that people walk into a branch, pick up a home loan off the counter and then walk out?

It is remiss of the board not to see through, or at least question, the bank's argument.

The redeeming factor is that a minority of the board did question the bank's argument - but not enough to make a majority.
Story: BNZ escapes censure - just


« More on Stobo...and something quite differentHFA - Pettett = ISI? »

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 6.35 5.25 5.45 5.99
ANZ 6.34 5.59 6.05 6.29
ANZ Blueprint to Build - - - -
ANZ Special - 4.99 5.45 5.69
ASB Bank 6.35 ▼4.99 5.45 5.69
Avanti Finance 6.65 - - -
Basecorp Finance 7.25 - - -
Bluestone 6.89 - - -
BNZ - Classic - 4.95 5.39 5.69
BNZ - Mortgage One 6.39 - - -
BNZ - Rapid Repay 6.39 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 6.39 5.55 5.99 6.29
BNZ - TotalMoney 6.39 - - -
CFML Loans 7.25 - - -
China Construction Bank - 5.35 5.80 5.99
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - ▼4.89 - -
Co-operative Bank - Owner Occ 6.25 ▼4.99 5.39 ▼5.69
Co-operative Bank - Standard 6.25 ▼5.49 5.89 ▼6.19
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 5.35 5.85 -
Heartland Bank - Online 4.60 ▼4.79 5.29 5.39
Lender Flt 1yr 2yr 3yr
Heretaunga Building Society 6.50 5.60 6.00 -
HSBC Premier 6.34 5.09 5.34 5.59
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 6.00 ▼4.79 5.15 ▼5.69
Kainga Ora 5.85 5.31 5.58 5.97
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 6.00 5.95 6.45 6.79
Kiwibank - Offset 6.00 - - -
Kiwibank Special - 4.95 5.45 5.89
Liberty 4.84 - - -
Lender Flt 1yr 2yr 3yr
Nelson Building Society ▲6.95 5.55 6.15 -
Pepper Money 5.29 - - -
Resimac 5.59 6.54 6.44 6.98
SBS Bank 6.29 ▼5.39 ▼5.79 5.99
SBS Bank Special - ▼4.89 ▼5.29 5.49
Select Home Loans 6.89 - - -
TSB Bank 7.05 ▼5.65 6.09 6.39
TSB Special 6.25 ▼4.85 5.29 5.59
Unity 5.65 4.95 5.55 -
Wairarapa Building Society 6.49 5.55 6.15 -
Westforce credit union - Special - 5.35 5.85 -
Lender Flt 1yr 2yr 3yr
Westforce credit union - Standard 5.85 6.05 6.55 -
Westpac 6.39 ▼5.55 6.05 ▼6.29
Westpac - Offset 6.39 - - -
Westpac Special - ▼4.95 5.45 ▼5.69
Median 6.34 5.33 5.79 5.93

Last updated: 11 August 2022 8:40am

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